April 20, 2014

CORN ETHANOL SUBSIDY

The “Tax Cut Extension” included an extension of the federal subsidies for ethanol made from corn, in spite of the fact that even Al Gore now admits it was a mistake. He admits it was to gain support of farm state voters in Iowa and Tennessee. It cost $7.7 Billion in 1998. (www.huffingtonpost.com)

Federal law currently mandates blending 12 billion gallons of ethanol, rising to 15 billion in 2015. This will cause  the Treasury to pay out $31 billion over this period.

We could get foreign sugar based ethanol cheaper but we have imposed a $0.54 tarrif to prevent imports while paying refiners a $0.34 subsidy.

The diverting of corn to fuel has now raised food prices in the U.S. and worldwide. (New York Times 1/19/11)

Finally, corn based ethanol yields only 1.34 energy units for each unit expended in its’ production. This is the lowest of all sources. Sugar yields 8 units.

The fifteen Senators listed below are active proponents of the subsidy. The Tea Party in their states should pressure them to withdraw their support if deference to the national need to reduce spending .

Grassley-R, Bond-R, Harkin-D, Nelson-D, Thune-R, Conrad-D, Klobuchar-D, Johnson-D,Dorgan-D, Johanns-R,Franken-D,Staberiow-D, Kirk-R, Caskill-D (Wikipedia-Ethanol Fuel)

Advertisers Block Here

Comments

  1. jrwilt says:

    It should be noted that adding plant based ethanol to gasoline is a good idea, it getting the ethanol from corn that is a very bad idea. Ethanol has significant anti-knock properties and thus improves octane number. Ethanol helps hold the water, ever present in gasoline, dispersed so it can go through the engine without causing problems. Plant based ethanol does not add carbon dioxide to the atmosphere. The carbon dioxide that the plant used to make what eventually became ethanol was taken from the air only a few months before combustion in the automobile engine puts it back into the air.

    Ideally the ethanol used as fuel would come from plant based materials now being burned or buried in landfills – paper and cardboard than cannot be recycled, sawdust and other wood scrap from sawmills, sewage sludge, etc. Technology does not presently exist to use all these sources, but small dollars put into research here could yield big dividends in the future.

    J.R. Wilt
    http:www.vanwyckpress.com

  2. RightDog says:

    The ethanol gasoline additive discussion brings up a couple of key issues, in addition to what is the best source of ethanol: a) is ethanol doing what it was intended to do? b) government subsidizing anything, in general, is a bad idea.

    This article suggests that ethanol in gasoline is not only not solving pollution problems, it may be harming the environment and ruining engines. Meanwile the ethanol lobby has been pushing for upping the additive from 10 to 15%, and by golly the EPA just announced its approval. Due process anyone?

    Subsidizing any product or service is simply wealth redistribution (using other people’s money) to the benefit or advantage of someone else. This is the old “robbing Peter to pay Paul, and you’ll never hear Paul complain” scenario, played to the fullest. Politicians (Democrats and RINO’s and even some that call themselves conservative) will always fight to maintain subsidies for their constituents as a form of “pork” so they can secure the votes to stay in power. Subsidies are used to prop up otherwise unprofitable enterprises. Government interference in the free market is never a good idea because the only one that wins is the “subsidizee”, not the rest of us. Check out this article to learn everything you wated to know about subsidies but feared asking.

    Ethanol subsidies are causing corn growers to put their product into the ethanol production market instead of into food (for livestock and humans) because there’s more money in it for them. The “unintended consequence” is increased prices of food products, and we have not seen the end of it, by far. Hold onto your wallet, especially now that E15 gasoline will be on the rise.

    In a related area, the boating industry (producers and boat owners) has been hard hit by ethanol in gasoline in two areas. (Full disclosure: I am an avid boater and have been in the boating community for decades) First, ethanol promotes disintegration of fiberglass resin reinforced gas tanks used on many boats. Ethanol slowly dissolves the resin substrate, contaminating the gasoline and eventually ruining the engine. Secondly, while ethanol helps keep any water contaminants dissolved in, rather than phasing out in, gasoline, ethanol itself is hygroscopic, attracting more water which in higher amounts will “phase out” and sink to the bottom. The relatively quick turnover of gasoline “stored” in a road vehicle supersedes this effect, but second phase water effects can be drastic in a boat fuel tank, and again will ruin an engine unless preventive measures are used. Gasoline consumption by boats is miniscule compared with road vehicles, so this will never be on the non-boating public’s radar.

    So, I conclude the following: a) the jury is still out on the efficacy, and lack of actual harm being done, with use of ethanol additive; b) anything the government puts its hands in as far as tweaking the economy, whether by “stimulus spending” or favoring a particular industry with subsidies (not sure there’s a difference), usually makes the situation worse, not better.

  3. Sue says:

    If anyone has researched the harm in using Ethanol added to gasoline (not to mention the cost of edible corn), they would also know that it destroys the rubber gaskets in motors. This is especially true for push or riding mowers, which aren’t used but maybe 6 months a year. Imagaine what it must be doing to vehicles!

  4. Mark says:

    Until I see the tea party unite nationally against the ethanol boondoggle, I just won’t believe they are worthy of my money. They sure sound good – but what politician doesn’t… until you hear what the other side has to say, and more important, until you FOLLOW THE MONEY. If they tea party has someone else’s interests at heart, to pad their wallets, I’m not interested.

    Until they vote for america, and not the business that gives them the most money, like how Cargill and ADM give money to Grassley and the rest of them, they’re just the same old politicians with a new name, for my money.

    -M

Speak Your Mind